Floater Insurance

What Is an Insurance Floater?

Floater insurance is a type of insurance policy that covers personal property that is easily movable and provides additional coverage over what normal insurance policies do not. Also known as a “personal property floater,” it can cover anything from jewelry and furs to expensive stereo equipment.

How Floater Insurance Works

Homeowners insurance often will not fully cover some items. Adding a floater policy assures the homeowner that the full value will be replaced in the event of theft, loss, or damage. These policies generally cover one individual item, so if you have several items for which you want full coverage, you will need to get a floater for each.

A standard homeowners insurance policy includes coverage for all perils included in your policy (such as fire, windstorm, theft, and vandalism) for jewelry and other precious items, such as watches and furs. However, there are limits to certain valuables.

Jewelry and other small valuable items are easily stolen, so the risk is higher. To keep coverage affordable, standard homeowners policies generally only provide about $1,500 in coverage for such items, which means that the insurer won’t pay more than that amount for any given piece of jewelry or other valuable items.

Here are some key items that floater insurance covers:

• Fine Art—Such things as antiques, books, china, crystal, collectibles, fine arts, furniture, glass, lithographs, mirrors, rugs, tapestries, paintings, pictures, sculptures, and silverware
• Firearms—Both antique and modern
• Cameras—Cameras of any type, projectors, and audio-visual equipment for personal use only, not professional use
• Sporting Equipment—Golf, surfing, tennis, or other types of equipment for personal use only, not professional use
• Musical Instruments—Pianos, guitars, electronics, and other types of music equipment for personal use only, not professional use
• Postage Stamps—Postage stamps and related items
• Collections—Collectible coins (including gold and silver), baseball cards, comics, LPs and CDs, and other collections 

Special Considerations

For those who own jewelry, furs, collectibles, or other costly or irreplaceable items, there are two ways you can increase insurance coverage to levels more in line with the value of those items. 

Floater Policy

This involves purchasing a floater policy and scheduling your individual valuables. This insurance option offers the broadest protection for valuables. Floaters cover losses of any type, including those your homeowners insurance policy will not cover, such as accidental losses—losing a ring down a drain or leaving an expensive watch in a hotel room. Before you can purchase a floater, items intended for coverage must be appraised by a professional.

It’s important to revisit floater policies every two or three years to make sure that valuations are current. You also want to make sure you add new purchases, especially those you may get for birthday or holiday gifts.

Raise Liability Limits

This is less expensive than purchasing a separate floater policy, but coverages are limited for both individual pieces and overall losses. For example, the coverage limits for an individual item could be $2,000, with a total limit of $5,000.

Example of Floater Insurance

Susan has just bought a new piece of jewelry worth $50,000. She goes in for a floater insurance policy in order to guard against theft and damage to the piece.

As part of the process of insurance, her jewelry is first appraised by a reputable jeweler to check whether it is, indeed, genuine and worth the price quoted. Subsequently, the insurance company puts a premium price on it, 1% of the piece's assessed value, or $500.

There are two types of claims available for the piece. The first one will pay for the piece’s repairs, while the other one will replace it at actual value. Because jewelry value does not depreciate with time (and can actually increase in some cases), there is a cap on the amount that the insurance company will pay to Susan in either case.